First Time Homebuyer Programs

First Time Homebuyer Programs


Buying a home for the first time is not an easy task.  There are many aspects to buying homes that people who have never bought a home before may not understand or have knowledge about.  It is not just the paperwork; it’s the terminology, the fees and the number of people involved.  It is natural to want to agree to whatever, sign everything and just get through the process as fast as you can.  However, it is best to know what you are getting yourself into before you make such a large commitment (read: investment!).

Here are some of the most useful homebuyer programs that you might overlook if you rush the process.  They may score you some big savings.

FHA: This is the go-to program for many Americans, especially first-time homebuyers and those who have a credit history that may not be ideal.  The Federal Housing Administration guarantees a portion of home loans, which frees lenders to broaden their acceptance standards.  With FHA backing, borrowers can qualify for loans with as little as 3.5% down.  You can search a list of FHA lenders near you at HUD.gov.

VA: The United States Department of Veteran’s Affairs helps service members, veterans and surviving spouses buy homes.  The program is especially generous, often requiring no down payment or mortgage insurance.  But like a lot of military operations, the approval track is built for accuracy, not speed.

USDA: This one may comes as a surprise you.  The United States Department of Agriculture has a homebuyers assistance program.  And no, you do not have to live on a farm.  The program targets rural areas and allows 100% financing by offering lenders mortgage guarantees.  However, there are income limitations, which vary by region.

Home upgrade programs: 

  • The Energy Efficiency Mortgage (EEM) Program extends your borrowing power when you buy a home with energy-saving improvements or upgrade a home’s green features.  If you qualify for a home loan, you can add the EEM benefit to your regular mortgage.  It doesn’t require a new appraisal or affect the amount of your down payment.  The program simply allows your lender the flexibility to extend loan limits for energy efficiency improvements.
  • There are also HUD 203(k) loans, designed for buyers who want to tackle a fixer-upper.  This special FHA-backed loan considers what the value of the property will be after improvements and allows you to borrow the funds to complete the project as part of your main mortgage. 

Fannie and Freddie: They may sound like classic ’70s rock bands, but Fannie Mad and Freddie Mac are the engines behind the home loan machine.  These government-sanctioned companies work with local lenders to offer some appealing mortgage options, such as 3% down payments.

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